what's up at csr, page-2

Shareholders of building and construction materials group CSR Limited (CSR) have approved the scheme of arrangement under which part of the group will be demerged under the name of Rinker Group Limited (RIN) .

Around 15,000 shareholders voted on the demerger resolutions, including around 300 shareholders attending meetings in Sydney. Over 99% of total votes cast were in favour of both the demerger resolution and the necessary reduction of capital. The final step in the demerger will be the seeking of approval of the Federal Court of Australia on 28 March.

After the demerger, Rinker Group is expected to be one of the world's ten largest construction materials groups, with annual sales around $5.8 billion and some 13,000 employees. Pro-forma compound average annual growth in sales has been around 12% over the past three years, whilst compound growth in earnings before interest, tax, depreciation and amortisation (EBITDA) has averaged 19% over the same period.

Although more than 80% of Rinker's business is in the US, Rinker Group Limited is incorporated in Australia, with its head office in Sydney.

Shares in Rinker Group are expected to commence trading on the ASX on 31 March under the code RIN. Standard & Poor's has announced that shares in Rinker Group will be included in the S&P/ASX 50 index (as well as the 100, 200 and 300 indices) with effect from 31 March. CSR will remain in the S&P/ASX 50 index, at least for the time being.

The Colonial Sugar Refining Company was established in 1855 and incorporated as a public company in 1887. Originally its name simply reflected its business: refining sugar. However, in 1936 the company began diversifiying, first into building materials, then later into construction materials, aluminium and timber. The diversification out of sugar prompted the change to the current, shorter company name in 1973.

However, in 1998 the group reversed its strategy, firstly with the sale of its timber businesses and then the sale of part of the aluminium operations. The demerger of Rinker marks the latest step in narrowing the company's focus, but the process still has some way to proceed. The remaining aluminium business and sugar operations are still candidates for sale given the right conditions.

After the departure of Rinker, CSR will remain a diversified industrial company, with sales revenue of about $2 billion.